convertible_and_wacc - 5.63 yield on straight SEE bond...

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Convertibles and WACC Balance Sheet Assets Book Market Liabilities Book Market Convert Total Cash 511 511 Debt 3330 3330  $375   $3,704.71  Other short ter 1036 1036 Convertibles 431 445 Long term 3243 6448 Equity 1029 4220  $70   $4,289.87  Total 4790 7995 Total 4790 7995 445 7994.58 Tax rate  35% assumed Beta 1.66 from biz.yahoo.com Treasury 4% Mkt risk premi 5.50% assumed Note: Breaking Down a Convertible Bond Coupon rate on Convertible Bond = 3.00% Market Interest Rate on Straight Bond of same Risk =
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Unformatted text preview: 5.63% yield on straight SEE bond Price of Convertible Bond = 1031.5 Maturity of Convertible Bond = 6 time to first put Value of Straight Bond Portion = $869.39 Value of Conversion Option = $162.11 Or see links on giddy.org to value the convertibl $1,031.50 WACC Convert 3.66% 5.15% 13.13% 8.74% le directly Conversion ratio 14.29 Stock price 49 "Intrinsic value" 700...
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